PROVIDENCE, R.I. -- A City Council subcommittee's review of tax breaks granted to commercial properties has discovered $106,000 of missed payments, a council news release says.

By Alisha A. Pina

PROVIDENCE, R.I. -- A City Council subcommittee's review of tax breaks granted to commercial properties has discovered $106,000 of missed payments, a council news release says.

Councilman David A. Salvatore, chair of the Ways and Means Committee, announced the find Thursday afternoon -- right before its meeting at City Hall started.

This winter, the subcommittee and Mayor Angel Taveras' administration have been simultaneously reviewing how tax stabilization agreements affect city finances.

Neither review is complete, but Internal Auditor Matthew Clarkin Jr. found during the subcommittee's review that the Promenade Building Association agreed in 2004 to pay $11,000 a year (for a total of $110,000) to support affordable housing, economic development and community services. The $88,000 "payment oversight," says the council, was immediately remedied.

Capital Cove LLL also agreed in 2005 to pay $392,000 to support affordable housing. Clarkin found it missed one $18,000 payment, due in June 2013. Capital Cove has already made the payment, the council says.

"The identification of the overdue contributions underscores the need for regular reviews to ensure property owners are complying with all the requirements of the tax stabilization agreements," says Salvatore in the news release. "These agreements are made to benefit not only the property owner, but also to benefit the city in terms of job creation, business growth, community investment."

The city has more than 100 deals dating to the early 1980s, a deputy city solicitor recently said. Of those agreements, about 40 remain active.

Stabilization agreements give companies tax breaks typically spread over 10 or 20 years. The city benefits by collecting tax revenue it may not have seen otherwise; the companies benefit by receiving a tax discount and a predictable tax bill. The tax breaks sought by developers are also pitched as ways to renovate buildings and create jobs.

With staff reports from Paul Grimaldi

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